Who Messed Up the Economy?

[EasyEs]

Some things you say don't jive with me..

I'll pose this question and see if you can answer it and we can work from that.

Why did Canadian banks such as Royal, TD, Scotia,and BMO, emerge rather well from the financial crisis. Can you name the regulations that prevented them from say handing out NINJA loans.

Also note up until 2002 the capital adequacy ratio was very close and moved in lock step, and why do few apply for increases in their leverage ratio to put it on par with US banks.

[kpp1212]

further, under what theoretical/empirical assumption are bubbles a direct function of leverage? look, i'm not trying to say that the fed policies were exactly right, nor deregulation or more regulation is the answer, but making simplistic arguments that have little logical underpinnings is something that we shouldnt condone. im just tired of people offering their opinions on these issues when they have no basis in actual economics.

[kpp1212]

in addition, considering that the u.s. has the most heavily regulated financial system in the g10(though more fragmented) what types of regulation would have prevented the crisis?could regulation prevent the bubble?under what assumptions?to what degree did moral hazard play?fannie/freddie? should these firms be more regulated?on the other hand, how might have the government subsidize excessive risk taking?why were there similar problems in europe?didnt the exact same thing happen in japan?

[kpp1212]

i try to stay away from debating people like this(where ad hominem rebuttals are common) but this analysis is so poor, i must ask some questions so that the uninformed dont become misinformed. first, what is the theoretical/empiracle evidence that low interest rates cause bubbles? was there a correlation between short term and long term yields? according to what model should rates have been higher?opposite of friedmans view?didnt he say greenspan was the best fed chair ever?

[chrizzy222]

good video should be more views hope this spreads around :)

[wolverineeeeeeeee]

yep to low intrest and no real gold reserve. Thats sold too? Who would buy all that gold anyway. The computer industry?

I read ian rand but i think no regulation at all will be an collapse in the end(but too much regulation is also not good for development). Like not tending to children they become criminal.

[TABOOVSKNOWLEDGE]

Alen Greenbubble!

[podman51]

A recent show over here, "Don't bank On the Bailout", by hedge fund manager Hugh Hendry, he's doing well by the way, says banks must keep out of the market and leave it to guys like him, and two, banks must never lend more than they have on deposit. Three types of help for UK banks: debt guarantees, short term loans, cash injections. Business does not want Keynes because public spending reduces private profit.

[radiohogan]

You left out the two biggest elements of the British program: (1) nationalizing the banks by buying portions of the banks (cash injections?) (2) insisting on making redundant(firing) the entire top rank of executives.

Public spending increases private profit, by increasing aggregate demand. Businessmen are often economic illiterates, but they create an image and the public views them as heros in an Ayn Rand novel.

[podman51]

Alan Greenspan-"Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity (myself especially) are in a state of shocked disbelief." In Rand's book Capitalism: the unknown ideal, he says "...it is the greed of the business man (and trustworthiness 121) that is the protector of the consumer." page 118 Signet 1963 - his argument

against "Welfare Statism".

[radiohogan]

Ayn Rand was a woman who never took an economics class in her life. She was a propagandist for the Power Elite.

Ayn Rand is a very popular author of books like "Atlas Shrugged," and "The Fountainhead." Ms Rand was a very conservative Russian immigrant who believed there are a small group of special, talented people in society and society cannot function without these special few.

Men like Alan Greenspan see themselves as part of the special people portrayed in Ms Rand's books.

[podman51]

Also, it appears that banking infrastructure is gradually replacing public infrastructure as a means government investment, which is really "taxpayer investment" to the detriment of public services. Another concern is the amount of public(generational) debt incurred by the use/abuse of keynsian economic solutions. What do you think Keynes would have made of it?

[radiohogan]

Part I

I am not to sure what your 1st sentence means. America has failed in its responsibility to maintain the public infrastructure (public services like roads, bridges, airports, etc.). European & Asian countries do so.

In America government is the dominant investor because the "defense" [ie offense] budget is half the total budget and the only manufacturing products America continues to make. This is not true in all other countries.

Government will always tower over banks.

[radiohogan]

Part II

While banks are failing in America & Europe, it is government that is buying into them and providing liquidity. Government will always be the lender of last resort.

As to inordinate public debt, Keynes would have said the obvious: it is inflationary. In terms of fiscal policy, Keynes recommended higher taxes and lower government spending as the way to control inflation and lower public debt. However, American militarism prevents this.

As a result, America will soon go bankrupt.

[EasyEs]

Mr.  radiohogan you do realize you just argued for free markets do you not.

[podman51]

The first sentence just means that the British government is now spending taxpayers money on the financial system, banks and so on, directly instead of indirectly via public works. On another subject, many retail items here are lower in price due to reduced consumer spending. "Pound Shops" are now popular with the middle-class. It is expected that massive public debt will reduce spending power, businesses to go to the wall, and prices to inflate.

[rosewood223]

Who is Ian Rant?

[radiohogan]

Ayn Rand is a very popular author of books like "Atlas Shrugged," and "The Fountainhead." Ms Rand was a very conservative Russian immigrant who believed there are a small group of special, talented people in society and society cannot function without these special few.

In short, she told the Power Elite what they wanted to hear. I suppose men like Alan Greenspan see themselves as part of the special people portrayed in Ms Rand's books.

The Irish say such folks are full of their own importance

[rosewood223]

lolx. i am back.

How are u?

I got C for my sociology term test.

[chris7777777777777]

interesting, I guess I am a pragmatist more that I think. Can't say I have ever heard the word.

[radiohogan]

Try watching my YouTube video entitled: "Existentialism & Pragmatism." Pragmatism consists of two elements: (1) judging reality [values, politics, ideas, customs, mores, etc.] based on the consequences of actions, ideas or whatever, (2) all categories of reality are valid and equal.

Pragmatism is the only uniquely American philosophy. It was developed at Harvard in the 1890's by William James & Charles Sanders Pierce.

[chris7777777777777]

William James & Charles Pierce? Were they philosophers?

[radiohogan]

Yes, they were philosophers who taught at Harvard in the 1890's. James was the first American academic to be invited to teach at a European university (University of Edinbrough). His series of lectures: "Varieties of Religious Experience" is a book still in print. You can buy it anywhere.

[chris7777777777777]

This is the first time I have agreed with you, your not turning conservative are you?

I know, Id eat humble pie all day with that kind of money in my pocket, these guys don't care.

[radiohogan]

As a pragmatist, I am free to operate in any category of reality. Therefore, I use whatever works in a given situation. Sometimes a conservative analysis is best. In his book: "Capitalism & Freedom" Milton Friedman points out doctors have a union that restricts the supply of doctors. By using the Sherman Anti Trust Act to bust doctors control of the supply of doctors, we would achieve a greater supply of doctors and concomitant lower medical costs.

Only Communist Cuba increased doctor supply.

[ArabicAtheist]

I think that restricting supply of doctors will keep this market in balance...because once you increase the supply the demand will be less and the salaries of doctors will go down and who wants to study for 4 years college 4 years medical school and 3-6 fellowship(specializing) plus 300K debt.

[radiohogan]

What we have here is an individual thinking about what is best for individual doctors, rather then society as a whole. Our man is in "solidarity" with monopolists (doctors), rather then those who are poor, working class and lower middle class. Lower doctors fees would mean some of the 65 million Americans who are without health care, would be able to afford to see a doctor. Our man has no heart for the 50% of bankruptcies that result from high doctors bills - this happens only in America.

[ArabicAtheist]

you dont have to accuse me with all this... I am posting my opinion just tell me why it is wrong dont be judgmental and offensive...

[radiohogan]

Do you plan to be a doctor in America?

[ArabicAtheist]

I am a doctor in america but I was not born a doctor I had to work my ass off... but this not the point. I was wondering if doctors are not well payed who would be willing to sacrifice his life to studying medicine,would this eventually affect the quality of health care?

[radiohogan]

Part I

The finest health care system in the Western Hemisphere, and possibly the world, is in Cuba. Cuban health statistics are far better then America's: infant mortality, longevity, etc.

Yet, doctors in Cuba are not well paid. The state pays for their education. In fact, Cuba has a program to train Americans to become doctors.

All the Best / Mike Hogan

[radiohogan]

Part II

So, the answer to your question is that great numbers of people are eager to become doctors even with low pay. The other answer is that such a system produces the best medical system. Again, you would need to understand the concept of solidarity.

Bourgeois folks have no concept of solidarity. I am not being judgmental or intentionally offensive. Many of our greatest writers have made such critical observations of middle class life. Geroge Orwell does so in "Homage to Catalonia."

[ArabicAtheist]

thank you Mr.Hogan I think you are well informed well read and I respect that...I will familiarize myself with cocept of " solidarity"... have a good one